Egypt and China signed a currency swap deal for $2.6b. This enables Egypt to increase foreign reserves after the EGP devaluation, reported Bloomberg.

Chinese Regulator stated that the Central Bank of Egypt (CBE) along with the Chinese central bank signed the 3-year swap agreement, with the option of further extension. Egyptian officials stated that CBE is studying the possibility of negotiating another loan swap with one of the G7 countries in order to decrease the demand for the USD, reported Al Bosa. They added that the exchange rate will be decided according to the official exchange rates announced by CBE.

Under the terms of the agreement, the two countries’ central banks should conduct annual revision to the deal and review the used amounts according to the trade between Egypt and China.

The agreement with China was one of the main factors used by the CBE in order to secure $6b to fill the IMF Board condition for its $12b loan to Egypt. Furthermore, CBE added in a statement that this currency swap “complements a series of measures taken which aim to unleash the vast potential of the Egyptian economy and instill confidence by bolstering economic activity.”